APPLICATION OF THE METHODOLOGY OF LIFE CYCLE COST ANALYSIS (LLCCA) TO THE ESTABLISHMENT ENERGY EFFICIENCY STANDARDS: BRAZILIAN REFRIGERATORS SILVA Jr Hercutano Xavier, **QUEIROZ, Guilherme de Castile, SANNUZZL, Gilberto De Martino. * State University of Campinas and International Energy Initiatives Package Technology Center. 1, Summary The goal of this paper is to present the work in the thesis developed by Silva Jr. (2005) who discusses [he application of the methodologies of Life Cycle Cost Analysis (LCCA) as a tool © propose energy efficiency standards. complementally to the voluntary labels already existing in the one-door Bravilian refrigerators. Another objective is t study the role of these instruments (energy efficiency labels and standards and envifonmental labels) as means to supply technical subsidies for the establishment of maximum level of electric energy consumption and environmental quality impact for clectrival equipments in Brazil. The LCCA methodology allows to evaluate the impacts of the energy efficiency increasing in electrical equipments, resulting in important saving (energy, financial, carbon dioxide emissions avoided etc.) for the country and its citizens. The results reached in this studies offer important data to subsidize deepered discussions with manut the zowernment to stipulate minimum energy efficiency standards for the Brazilian refrigerators, Thus, with increase of 28.1% on the energy efficiency of the one-door Brazilian refrigerators in 2008 to reach a values of savings that can be in order of $4.63 TWh (wilh respective reduction of demand power of 208 MW). of US$ 6.23 Billions of Dollar (RS. 17,2 Billions of Reais! of reduction in the account of eleetric energy for the population and of approximately 22 billions of tons of COs nol emitied on the environment after 30 years of the implantation of standard. These values, that can’t be despised by government manufacturers and consumers, One other interest of this work is to start the discus: the possibility of the ereation of environmental labelling (e,g,, Green Seal ~ USA, Eco- label ~ EU ete.) that is an additional program/methodology, which, it may be utilized as support for development of teehnoloyies and for the increase of energy und environmental efficiency of the electric equipments, These labels are strategically important for Bravil (o amplify the enviranmental programs to their products because they can facilitate the insertion of these products in the international market, at the same time. that the country gets in the increase of the quality (environmental ete.) and promotes the sustuinable development around the world. turers 2. Introduction In 20001-2002 Brazil had a erisis in the electric sector that was popularly called “Apagaio". AL first, absence of rain was considered responsible as reason of ration thus due to do Brazilian generator park be established approximately by 90% of el power, Aflerwards, it was verified that the “Apayio” aused by omitting of investment in the national electric sysiem. At that time. necessity of the consumption of slectri¢ energy was until 20% in most of the Brazilian States, although, a few States went on with their normal consumption, The electric power continued is their maximum limits of storing of water and even hecing obliged to dismiss water, These happenings contributed for the economic retraction of de Country, stopping internal and external investment and causing collapse in companying and dismissing and partial privation of was also Fuergy production, lisiribation and conservation - Milan 2006 27298 the utilization of the public real estate, “Electricity”, the most part of Bruzilian population (1). The facts as the previously mentioned should bring teclings also concemed to the necessity of a new sustainable! consumption culture. It is very important the the government created programs of concretization of the importance of using, in a rational form, the natural recourses. Another factor that most be considered is the economic, hecause, today it has beeinig disseminated the necessity of join effort to proiect the environment and, consequently. the human being survival. Thus, many countries are already demane form their suppliers (of varied product) # great worry in producing end products of high quality and, at the same time, respecting Nature (3). This has being demanded through of national programs of energy labelling (abel of energy efficiency) and, more recently, environmental (Keologic Labels), The manufacture who not adjusted to these demands may be prevented of commercialize his products in these countries, causing economic and social problems far his company and for his country Nowadays. in Brazil there are modem instruments of incentive (Energy Efficiency Law, compulsory investments in energy eificiency from the electric energy company. Labelling Brazilian Program ~ PBE, National Progeam of Flectric Energy Conservation, ete.) to the technologic innovation introducing more rapidly the products energetically more efficient in the consumer market The energy efficiency programs are tools that help in the reduction of consume warranting comfort to the population and eeonomie development to de country tquality af the equipments, great private investments, etc.). Brazil has already the Law 10.29 (4), regulated by decree 4.059 (3) that regulate about the “National Program of Electric Energy Conservation” establishing action group to study and establish minimum standards energy efficiency for electric energy consumer equipments that are traded in the country Therefore, partnership among government, manufactures and academy and research institutions may contribute for the development of equipments and methodologies that aimed evaluate and fumish technologie resources for this aim, beside to propose energy eflicieney standards (index) capable of being utilized by national industry. Thus, the subject presented here suggesis a sustaining methodology to the establishment of the roles of energy efficiency. The most important part of the work developed are the studies and the application of methodology of Lite Cysle Cost Analysis (LCCA) for the establishment of Minimum Energy Performance Standards (know in the literature as MPES). The energy efficiency standards and labels are they, voluntary or compulsory, have the goal of establishing references for the energy electric consume, These instruments have being widely used around the sorld as capable instruments for the realization of the transformation of electric demand in the energy market In this way, the goal main of this work is ty discuss the application of the methodology of Life Cycle Cost Analysis (LCA), as a tool to propose complementary energy " Sustan iecensities of polation, without implicating the necessities and wishing of future generations (2) ible consume means to uss with a saie conscience the satural resource w satisfy the actual299 efficieney standards 1) the voluntary labels alrendy existent and. the possible environment labels for the ene-door *Brazilian refrigerators 3. Energy Efficiency Standards and Labels Here is presented a brief review of some examples of energy efficiency standards and labelling progeanis’ applied around of world and in Brazil. 3.1, Examples of some Labels in World and in Brazil Today in the world exist several countries that ugreed to the energy efficiency programs and many of them make the labels in a compulsory character. One of the most known, according to CLASP (6), is the comparative energy efficiency European Union label, illusteated in Figure | Energi Figure 1 — Furepean Union Label: classification by category (2). The comparative Europeun Union label classifies the consumption. in kWh-yvar, of the equipment by categaries (A,B. C.D, E, F and G), Thus. the equipments that reach the category “A” will be the more efficient than the found in the category “G", Brazil adopted the model of the comparative European Union Label in the Labelling Brazilian Program (PBE). We can also find in use the labels called Endorsement Labels* (7), Through this label the consumer will only have the information (ceedihility) that appliunee was approved after have passed by texts used determined energy efficiency rules. To example we have the Energy Star Label (Figure 2) that has been much utilized in computers and, at this moment have been applied also in the ventilation area, heating. air-conditioning, office equipments (6) and, more reeently in the United States refrigerators (8). In this wrk, we aualyze as a case study that applies th domestic refrigerators, [he justification For this choice happens because the refrigerators ate besise the loctric showers, the most consumers ofeleetricity sa residency, being its erm sumplion of electric energy is equal to Ws af all residencies. Effisienoy Vabels are permitted tn the electric appilianee smd equipments that purtiipace ot xy slficieney program and that are inside of the consumption levels (electric energy) previously establishal, The cnergy elficieney standards are provedires and cules established by law tul instnim that scipulate the minimum performance oF a product manufactured of gompulsary farm of not * Endorsement Labels ai seals that wleady own a quality evaluation rules aid performance of belie approved product, These labels are typically applicd in products considered Top-Tier, that is, the mare ellicient products of a market proposed methodologies, the one-slave Brazilian300 Figure 2 - Energy Star label: Endorsement Labels (8). in 2000 was implanted in Japan an energy labelling program with voluntary character The goal is to incentive the manufacturers to present equipments with the lowest consumption index possible. The appliance (model) that reaches the smallest consumption index will receive the exclusive Top-Runner Label. The other models that didn’t reach the index will reevive another label volor, indicating its how they are less efficient (in %) comparing to the Top-Runner. This ig a way of stimulate the competition among manufacturers and technology innovations in energy efficiency, because the model that consume less energy in a year will be the Top-Runner for the next year, The PROCELINMETRO Label of energy saving (Brazilian Label - Figure 3) is a rc! conceded annually to the electric equipments that present the most satisfactory energy efficiency rate (Category “A” of the comparative Label - Figure 1) inside of respective modalities. The mean this reward is to stimulate the national manufseture of household products more elficient in the modality saving energy and to orient the consumer, in the instant of purchase, they to acquire equipments that present beites efficiency level (9), ren Fi re 3: PROCELANMETRO Label of Fnergy Saving (10), 5.2, Energy Efficiency Standards The energy effivieney standards had its origin in 1962 in Poland. The French government established standards 16 the refrigerators in 1966 and to the freezers in 1978, Others European governments, including the Russian government, introduced legislations authorizing the exigency of information referring to efficiency in labels and its energy performance in standards during the years 1960 and 1970 ((6), (IL). in the countries were these pragrams are practiced in compulsory character there is prohibition of selling of products that are beneath of minimum energy efficiency: allowed by standard (e.g, USA a, France ete.), In the countries were they practice energy efficiency standards programs in a voluntary character (e.g. Hong Kong, Japan ‘un301 tlc.) it is mot forbidden, but they stimulate the consumer to buy the equipments with a label (more efficient) with programs of information etc. The standards establish a minimum efficiency (or maximum energy consumption) than the products included in the program may present. These standards allow innovation and project competitions among the manufacturers and the agreement is determined by laboratory texts. For example, it unit most consume not more than a maximum quantity of energy per year, according Lo the texts previously-established The Law n" 10,295 display that “The government will establish maximum consumption levels of energy or minimum cnergy efficiency. of machines and appliances. that consume electric energy manufactured or traded in the Country, based in the concemed technical index (4). This Law, settled by decree n° 4,059. assigns responsibilities 1a an evaluator committee co-ordinated by the Mines and Energy Ministry (MME) (9), The ric engine was the First Brazilian electric equipment ta which was established an energy efficiency standard. as display the decree n° 4.508 “The specific regulation that decides the minimum energy efficieney standards af electric engine of three phases of Induction, of national or imported manufacture. for commereialization or use in Brazil...”. Jhus, the minimum energy efficieney standards establighed for electric engines are of compulsory character. So, the manufacturers of electric engine (as Brazilian as Foreigner) who want to trade their products in Brazil will be obliged to udjust to the new exigencies established by the Law nY 10.295 and by Decree n° 4.308 The settlements of standards for other types of appliance and equipments are already being studied in MME. 4. The Methodology Suggested for the Establishment of Minimum Energy Efficieney Standards The necessary information to analyze a Standard depends on the method use for its establishment or of the resuurce available for its development. The Figure 4 is a schematized diagram that shows the steps involved in the choice of the method of anal ysis or Standard establishments, Locally Mmutactured Products Imported Products Abplianeé Chi ele ‘teristics — Mlistirieal Sales — FficiencyEnergy bse — riny'Eeono Analysis Step Involved in the Choice of the Method or Establishment Standards (1). Figure302 These Steps are Basically three The negotiation for it product, that involves search of inforntation about; a) If the product is made in the country; b) If there are importation of this product, which are the technical characteristics of the appliances cte.; C) IP a determined product still don't have the standard and/or label energy efficiency, is recommended to do a simplified’ analysis. On the contrary. if it passes lor the following Step. ‘The second information to be answered is, display, of data about the project of the product. If is not possible to obtain these dats with the manufacture. the Statistical Analysis’ is chosen to propose the standard. In affirmative ease, il is chosen the methodology of Life Cycle Cost Analysis (LCCA) (the whole analysis of engineering/economy and Payback) For some countries, it can’t be possible to use all the steps indicated in Figure 4 due to not existing a good data historical necessary for the application of the methods of Statistical Analysis and CCA, So. at least the simplified analysis most be used in any situation. 4, Methodology LCCA ‘The methodology of Life Cycle Cost Analysis is the junction of three known technical, being: the engineering ‘economy Analysis (searching of technolagic innovations), the Life Cycle Cost and the Payback Period. The sequenee of calculations of this methodology is made afler of the engineering analysis, here called of step 0, in which are simulated the possible technologival innovations in the equipments analyzed. Step | — the Life Cyele Cost (LCC) is the total expense of the consumer along the lifetime of the equipment, included not only the purchase cost, but also the operating ost (consumption of electric energy and maintenance) discounted by the Constant over time (Equation 1). LCC=P, > £0, (ery a Were. =P, =P+Cl Q * Po Retail purchase cost summed a innovation cost, + P= Retail purchase cost of the hase product (consumer value) * CO =Annuul operating Costs (Value paid by electricity consumption ete.) * r= Consumer real discount rates * {Constant over time (years), From product purchase: * — N=Lifetime of the product (years); and + Cl= Innovation cost fas been analyzed. Assuming that the aperating costs don’t wary, il is obtained the Equation 3: “This analysis consist of a simplified teehnical-ceanomic analysis, that is, it is culleted some models of a product that is sold the market and itis made the comparison of enetpy performance among than, "The Statistical Analysis consists of a Technival-econornie analysis less specified than the LCCA, that is, itis calteied models of the national market and it ig made the comparison of energy performance armong ‘than through of graphic, The next step is to obtain a tevel of medium energy performance throug of a linear regressing of all the models eollested for the study. IF it is found equation of the level of the medium energy pertirinanee, i is inserted the efficiency saving previously-lelernined by the regulating aueney (eg. chergy saving of 10%, 15%. 20% ete.). With the insert of effieieney saving in the linear regressing, it is fund the standard straight fine line the new levels af energy efficiency the will be uilized as reference For the consumption of electricity of the new equipments and clectric-slectronic appliance de andor erate303 : 1 LCC =P, + “co wd (+ ry’ 8 The expression 4 is called Present Worth Factor (PWE)( 12): ‘ ) y 4 -41- _|=P0F wy ailery orl (ee)? If itis substituted, thus, the Equation 4 in the Equation 3, it is obtained the Equation 4. LCC = P+ PHF *CO «) Step 2 - aller determining the LCC of the product (different for each option of inovation) it is calculated the Payback Period = PAY. The PAY furnishes the necessary fame for the consumer to recover additional due 10 the increase of efficiency, due to the smallest operating costs of the appliances and equipments. The PAY is obtained through the resolution of the Equation 6 (11), ear Cr+ YAcor=0 © 7 The ACO is the difference of the operating costs before and afer the insertion of the innovation be analyzed. Assuming that the difference of the operating costs (ACO) it is maintained constant over time (t), the expression has a simple solution: Cl PAY = { al eth Found Results The methodology of the LCCA has a technical base originating in simulations of ‘echnical improvements in the refrigerator not despising economic calculations that take in consideration the refrigerator lifetime, Payback Period for the consumer, the technical innovation costs and the Lite Cycle Cost (LCC). being possible to obtain, in this way, the investment net save that is the difference between the total save obtained and the efficiency project cost (operating costs summed a innovation costs). These economic calculations are important to help in the feasibility or unfeasibility of the energy efficiency project. ‘Thus. it is proposed by case study of the LCCA thal the energy efficiency af the one- door refrigerators commercialized in Brazil could increase as a rule 28.1% in 2008. "hese efficiency saves can be reached through the technologie innovations as. the utilization of compressor more efficient and other innovations, already existing in the market, as: initial inerease of 4” and afterwards of 1” in the thermal wall insulation thickness, door of the refrigerator etc. The standards proposed by LLCCA it is presenting economically feasibility, with a Payback Period of 6 years, approximately ‘/3 of lifetime ofa reffigerator is estimated in 16 yeurs, In period from 2008 to 2038, the quantity of energy saved may reach the amount of 34,6 TWh, the quantity CO; avoided emission can reach 1] millions of (CO; and the Brazilian consumers can save approximately USS 6.23 billions of Dollar in their electric bills, With the acquirement af standard it was established also, the Energy Efficieney Rate to each category of the PROCEL/INMETRO comparative label for the one-door refrigerators,304 Table 1: Propose of Energy Efficiency Rate to the Standard I (28,10%) in 2008 The example to follow has the goal to facilitate the interpretation of the Energy Efficiency Rate of the Table 1, Thus, it is taking of adjusted volume of the refrigerator (e.g, 330 liters) and it is divided by its monthly consumption (¢.g. 17,34 kWh/month) is obtained the EER = 17,10. It is comparing the EER = 17,10 with the Table 1 (Standard in 2008) the refrigerator is in the category “F” 6. Conclusions The use of tools and methods that simulate the performance of the refrigerator to propose technical innovations and the use of the methodology LCCA that is possible to obtain significative reductions in the electricity consumption of the Brazilian refrigerators, The big advantage of analysis presented through the application of the methodology of Life Cycle Cost Analysis is to permit valuation of innovation impacts (technologic improvements) feasibility economically (cost-effective) in refrigerators (e.g. of one-door), resulting in important saves to the Brazilian consumers and for the Country and to stimulate the dispute of a market of quality for the Household Sector Although, when it isn’t possible to collect the data claimed to application of LCCA (innovations technical data, Costs etc.), it can utilize to the methodology more simplified as previously mentioned So, the recommendation of the implantation of the standard obtained with the LCCA of 28,10% in rate of the household sector of energy efficiency increase and of the proposal of the Energy Efficiency Rate (Table 1) in 2008 This study recommends also, the development of an environmental label for the Brazilian refrigerators. Those labels are already being utilized by several countries around the world (c.g. Green Seal — USA, Eco-Label ~ EU cete., Figure 5), stimulating the manufacturers to adjust in their rules in other to trade their products in those countries, ‘igurs EU) and Green Seal (USA) (14). Brazil doesn’t still won this type of environmental label for refrigerators, but if nothing is done to change this situation, the Brazilian manufacturers refrigerators may have difficulties, by countries that claim the environmental label, to export their products, the305 Brazilian consumers will continue acquiring products with inferior technologies and possibly with higher environmental impacts and the Country will go on suffering environmental impacts due to the increase of the demand in the electricity consumptions from of energy and environmental inefficient appliances, Although, it can't only give emphasis to the side of the economic strategic as advantage to the utilization of environmental label programs. These programs seek mainly to reduce the environmental impacts caused by all manufacture chain of a product, it is seeks the technical quality of the product (energy efficiency programs) and also seeks the life quality and physical integrity of the consumer (e.g. preoccupation with noise levels, with materials that can provoke allergy, that can contain parts that cause accidents by perforation, cutting etc.). Thus, the environmental label programs hold important differences before the energy efficiency programs because embody, not only. the technical aspects of functioning of a electric equipment (energy performance), were the energy efficiency labels and standards are fundamental, but also, all the aspects of the life cycle of the product. So, those programs allow (o analyse and to reduce the portion of responsibility of a product in the impacts occurred a environment, from the withdrawal of its raw material in nature, passing by all its productive process, distribution logistics and end use with consumer until to come a end its lifetime (its discard or serapping). as it is shows the Figure 6. ‘Manufacturing Use End of life Pas > toons remy = ects ~ | venice aN iii Fengesos POR tesmctintgtin ~~ nandsaery Jo § —————» _ pumretintracn ia see] f me Od Ne Pe a en vies =, NQwe Se oe: Figure 6; Schematic diagram of the Life Cycle Analysis (13). Thus, here is the recomendation for the next Works, of a study about environmental labels, the complete the analysis of the energy efficiency standards and labels, here already presented. It will be necessary, new simulations, using specific software. new considerations about technologic innovations, study of the improvement of the energy efficiency and of the environmental impacts also for other consumer equipments of electricity and even the developments and/or adaptation of the methodologies of the international environmental label programs for the Brazilian case. Portanto, fica a recomendagdo, para proximos trabalhos, de um estudo sobre rétulos ambientais, que complementa a anilise dos selos e padres de eficiéneia energétiva, aqui apresentada, Serdo necessirias, novas simulagdes, utilizando softwares especificos novas consideragdes sobre inovagdes tecnoldgicas, estudo de melhoria de eficiéncia energética e de impacto ambiental também para outros equipamentos consumidores de ecletticidade © até mesmo desenvolvimento efou adaplagao das metodologias de programas de rotulagem ambiental internacionais para o caso brasileiro.306 7. Bibliographic References (1) SILVA Jr., Herculano Navier, Aplivaciio das Metodotogias de Anilise Fstatistica ¢ de Analise do Custo do Ciclo de Vida (ACCV) para o Estabelevimento. de Padroes de Fficigncia Enesgética: Refrigeradores Brasileiros, Campinas: Faculdade de Engenharia Viecanica, Universidade Estadual de Campinas, 2005. 144 p. Dissertagao (Mestrado) (2) MMA, Ministério do Meio Ambiente, Politicas para » desenvelvimento sustentivel Guia debs ~—pritieas. «pat. = 0consumo —sustentdvel, — URL: www.mma.goy.br/port/sds/guia.html. acesso em 04/2008. (3) CLASPONLINE, URL: http://www claspontine.org/standard- label/development#labeling/label-design2.php3, acesso em 17/09/2004 (4) BRASIL, Lei N° 10.295, Dispde sobre a Politica Nacional de Conservacaa ¢ Uso Racional de Energia e dé outras providéncias, Subsceretaria de Infonmagées do Senado Federal, 17 de outubro de 2001. (5) BRASIL. 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(9) PROCEL, Programa Nacional de Conservagio de Energia Eletrica (PROC EL’Eletrobras), URL: hitpymww.eletrabras.gov.br/procel/ htm, acess etn 041032008, (10) INVETRO - Instituto Nacional de Metrologia, Normalizagio ¢ Qualidade Industrial, URL: hitp://www.inmetra.gov.br, acesso em 16/04/2004, (11) BOR, WS. Department of Energy, ‘echnical Support Document: Energy Efficieney Standards for consumer products: Refrigerators, Refrigerators- Freezers, & Freezers, Jilly 1995, 391 p. (12) KAPLAN, Seymour, Energy Economies: Quantitative Methods for Energy and Environmental Decisions, MeGraw-Hill, New York, 1983, 347 p. (13) Eco-Lubel, URL: http:tiwww.eco-label.com, acesso em 2305/2005,